Investors in Premier Inn’s owner will be hoping the UK’s largest hotel chain has been given a summer boost on the back of rising hotel prices and fans flocking to UK concerts.
Whitbread, which also owns the Beefeater and Brewers Fayre chains, will publish its half-year financial results on Thursday.
A group of analysts for AJ Bell pointed to reports suggesting that “bookings and pricing have improved over the summer in the UK” with some shareholders expecting some “good news” from the latest results.
Official inflation data showed that annual prices across UK hotels jumped in July and August, largely driven by an increase in overnight hotel stays booked the night before.
This coincided with a series of large events including Oasis’ reunion gigs and Coldplay concerts, which led to high demand for hospitality and hotel rooms among hordes of fans.
Richard Hunter, head of markets for Interactive Investor, said: “There was little for investors to cheer in the company’s update in June, even though it needed to be taken in the context of Whitbread’s ambitious five-year plan.”
At the time, the company revealed its accommodation sales had fallen by 2% in the first quarter, compared with the previous year.
It also reported a sharp 16% decline in food sales year on year.
This was partly attributed to it being in the midst of a £500 million plan to revamp its restaurant business, which involves converting 112 branded restaurants into new hotel rooms and selling 126 more.
Whitbread previously said it was on track to save £60 million in this financial year.
“The irony of the ravages wrought by the pandemic is that it provided Whitbread with some major opportunities given a structural shift in the sector,” Mr Hunter said.
“Many independent hotels went to the wall as a result and there was next to no new hotel construction activity, which opened up the market to the larger operators.
“This contributed to Premier Inn becoming the largest hotel chain in the UK, with a 12% share of total hotel room supply.”
Meanwhile, AJ Bell said investors will be keeping a close eye on Whitbread’s expansion plans, with it targeting an addition 1,000 to 1,200 rooms to its existing 86,000-strong UK estate this financial year.
